Question: Cosmo Industries recorded the following

> Describe the three generic strategies for dealing with the environmental effects of operations. Is one of the strategies always preferred to the others? Discuss.

> What is business process reengineering? Does it lead to radical or modest changes in business practices? Discuss.

> IMeg manufactures various electronic assemblies that are sold primarily to computer manufacturers. IMeg’s reputation has been built on quality, timely delivery, and products that are consistently on the cutting edge of technology. IMeg’s typical product

> How would switching from a traditional manufacturing system to a flexible manufacturing system affect a firm’s inventory and production control systems?

> What changes must occur in a production environment to effectively implement JIT? Why are these changes necessary?

> You are employed by a firm engaging in heavy manufacturing. Its direct materials are sourced globally, but its non operating inputs are sourced from a variety of U.S. vendors. You have been charged with making a presentation to the CFO about the benefits

> What are the primary goals of the JIT philosophy, and how does JIT attempt to achieve these goals?

> What is kaizen costing, and how does it differ from target costing?

> Why does the development stage have such a significant influence on a product’s profitability over its life cycle?

> What is target costing, and how is it useful in assessing a product’s total life cycle cost?

> How does a product’s life cycle stage influence production cost management?

> Differentiate between the push and pull systems of production. Is JIT a push or a pull system?

> What is Pareto inventory analysis? Why do A items and C items warrant different inventory control methods? What are some methods that can be employed to control C items? Companies making purchasing (rather than production) decisions often compute the eco

> Gale’s Garden grows and sells a variety of indoor and outdoor plants and garden vegetables. One of the firm’s more popular vegetables is a red onion, which has an annual sales quantity of approximately 30,000 pounds. T

> How are ordering costs and carrying costs related? Companies making purchasing (rather than production) decisions often compute the economic order quantity (EOQ), which represents the least costly number of units to order. EOQ indicates the optimal balan

> What is the theory of constraints? How is this concept appropriate for manufacturing and service companies?

> What is the Malcolm Baldrige National Quality Award? Why would an organization apply for that award?

> New England Automotive manufactures aftermarket automobile parts that are sold in a variety of outlets including auto parts stores and discount retailers. The following account data (in millions) have been taken from a recent balance sheet: Current Asset

> What is TQM? What are the four important tenets of TQM, and why are they important?

> Describe four types of benchmarking. Use the Internet to find a company that has engaged in benchmarking. Describe the type of benchmarking used and the benefits and costs of the company’s experience.

> Compare and contrast the eight characteristics that constitute overall quality from the customer’s perspective with the three additional characteristics that constitute service quality from the customer’s perspective.

> Why might a common set of global quality standards be needed or desirable? Most large companies view their markets on an international rather than a domestic basis. To compete effectively in a global environment, companies must recognize the need for, a

> Compare and contrast the EFQM Excellence Model with the Malcolm Baldrige National Quality Award criteria. Most large companies view their markets on an international rather than a domestic basis. To compete effectively in a global environment, companies

> What factors create uncertainty when estimating future costs and revenues?

> Recent years have been characterized by high, and volatile, energy prices. Some critics of the energy industry suggest that the oil companies’ use of JIT inventory management has contributed to the volatility in prices and the supply constraints. Further

> What are the four generic approaches to reducing uncertainty? Describe the context in which each approach is typically used.

> How does strategic cost management link information to corporate strategies?

> Why do firms hold cash balances? Why do some firms hold larger cash balances than other firms?

> In the production–sales cycle, what are the four points at which quality costs are incurred? How are these costs interrelated through these points?

> Assume that Honda Motor Co. Ltd. paid for a full page advertisement in The Wall Street Journal. The ad neither discussed any Honda products nor referred to year-end earnings or a new stock issuance. Instead, the ad informed readers that “buying quality p

> Define the terms efficiency and effectiveness and distinguish one from the other. Why is measuring the efficiency of discretionary costs often difficult? Explain how the effectiveness of discretionary cost activities can be measured.

> Why is it often difficult to measure the output of activities funded by discretionary costs?

> Differentiate between committed and discretionary costs. Could a cost be considered discretionary by one firm and committed by another? If so, discuss and give an example. If not, discuss why not.

> What factors can cause costs to change? Which of these factors are subject to cost containment and which are not? What creates the difference in controllability?

> At what points in time is cost control for any specific organizational activity exercised? Why are these points of cost control important?

> Wisconsin Wire (WW) has implemented a just-in-time inventory system for the production of its insulated wire. Inventories of raw material and work in process are so small that WW uses a Raw and In-Process account. In addition, almost all labor operations

> Why does the general control model begin with planning activities?

> What is meant by the term quality? In defining quality, from what two perspectives can a definition be formulated? Why are both important?

> Strategic alliances and joint ventures are being used with increasing frequency to exploit market opportunities. Virtually all larger firms are involved in several to many strategic alliances. a. From the perspective of controlling the quality of product

> Employees expect that all parties will honor their explicit and implicit obligations. Distrust occurs when these obligations are not met or when the parties have different expectations regarding the obligations. When downsizing is employed as an organiza

> Borders and Amazon .com are competitors in vending books and other consumer items. The two are differentiated to an extent by their marketing strategies. Although Amazon.com relies exclusively on Internet marketing, Borders operates both retail stores an

> Find a company’s Web site that provides information on the characteristics that are desired for that company when establishing long-term/preferred supplier relationships. a. What characteristics are listed? Why do you think each of these is important? b.

> Dayna Moore, CEO of Layton Transmissions, sat dejected in her chair after reviewing the 2011 first-quarter financial reports on one of the company’s core products: a standard, five-speed transmission (product #2122) used in the heavy equipment industry i

> Automakers provide an interesting study in cost management strategies. General Motors often provides a contrast to other U.S. manufacturers. For example, Chrysler and Ford opted to outsource many product components, but GM continues to manufacture a much

> Most experienced CEOs have seen command-and control management come and go. They’ve been through downsizing and rightsizing. Now they’re seeing most companies (their own included) working to recast themselves as ‘high-performing’ organizations, with stre

> One of the key drivers of downsizing and outsourcing is globalization. Recently, the Organization for Economic Cooperation and Development (OECD) acknowledged “growing unease about globalization.” The organization expressed concerns that in some countrie

> Allridge University formed a new department to recruit top out-of-state students. The department’s funding for 2010 was $1,600,000, and the department was given the goal of recruiting 600 new nonresident students. By year-end 2010, the department was cre

> Most accounting professionals would agree that the accounting profession has developed effective tools for measuring and reporting events involving tangible assets. Most might also agree that the profession has miles to travel to report as effectively on

> The chapter discusses three approaches to managing environmental costs. Some strategies deal with hazardous waste only after it has been produced. a. Does a firm have any ethical obligations not to produce hazardous waste regardless of how successfully i

> Indicate by letter which of the three categories apply to the following features of just-in-time systems. Use as many letters as appropriate. D = desired intermediate result of using JIT U = ultimate goal of JIT T = technique associated with JIT a. Reduc

> Horizon Resins has experienced serious problems as a result of attempts to manage its impacts on the environment. To illustrate the problems, consider the following events, which occurred during the past five years: • Horizon was assessed $75 million in

> In early 2007, Burger King, under pressure from animal rights activists including People for Ethical Treatment of Animals (PETA), announced it would start purchasing pork and eggs from suppliers that use cage-free animal management methods. In its announ

> Nanotechnology may be the future of manufacturing. The term refers to any area of research that deals with objects one-tenth the size of an atom. According to the Center for Responsible Nanotechnology and given the current rate of development, general-pu

> Altazar Electronics has identified the following 2010 warranty costs for one of the company products. The information has been categorized according to the type of product failure. a. Rearrange the rows in descending order of magnitude based on the Tota

> Go to the Web site for the Malcolm Baldrige National Quality Award and find the answers to the following questions: a. When and why were the health and education categories established? b. How do the criteria for the health, education, and manufacturing

> Three possible goals for a business are to (1) maximize profits, (2) maximize shareholder wealth, and (3) satisfy customer wants and needs. If goal (1) or (2) is chosen, the primary measurements of “success” are organizational profitability or stock pric

> In 2008, pharmaceutical company Genentech withdrew its psoriasis drug Raptiva from the market because it was linked to a rare but often fatal brain disorder (progressive multifocal leukoencephalopathy) in patients who used the medication. There were abou

> Many companies are becoming ISO certified because of customer requests and because of the need to compete in the global marketplace. a. Why do you think customers are insisting that suppliers meet ISO 9001:2000 standards? b. Does meeting ISO 9001:2000 st

> Choose an organization with which you have a solid familiarity (this may even be your fraternity, sorority, or college). You have been placed in charge of initiating a quality culture in that organization. Access at least four Web sites that refer to thi

> Houston Health Clinic has used funds during 2010 for the following purposes: a. Sent two cost accounting staff members to seminars on activity-based costing. b. Purchased a kidney dialysis machine. c. Built an attached parking garage for the clinic. d. R

> Assume that you are in charge of Physicians Social Service Agency, which provides counseling services to low-income families. The agency’s costs have been increasing with no corresponding increase in funding. In an effort to implement some cost reduction

> Laura Johnson, Technical Instruments Division manager of Worldwide Electronics, attended a 30-minute seminar on open book management recently. As a result of the seminar, she decided to implement some open-book management practices in her division. She b

> BreatheWell is very aware that its scuba diving tanks must be of the highest quality to maintain its reputation of excellence and safety. The company has retained you as a consultant and you have suggested that quantifying the costs would be important to

> Golf courses are demanding in their quest for high-quality carts because of the critical need for lawn maintenance. Antaris Co. manufactures golf carts and is a recognized leader in the industry for quality products. In recent months, company managers ha

> Elijah Electronics makes PDAs. The firm produced 45,000 PDAs during its first year of operation. At year-end, it had no inventory of finished goods. Elijah sold 42,300 units through regular market channels, but 450 of the units produced were so defective

> In mid-2007, numerous findings of unsafe products produced in China were disclosed, including pet food, fish, toothpaste, toys, and fireworks. In early 2008, the FDA pointed to Chinese companies as the source of contaminated heparin, a widely used blood

> Wilson Ceramics manufactures holiday ornaments in its sole plant located in Wisconsin. Because the demand for the company’s products is very seasonal, the company builds inventory throughout the first nine months of the year and draws down inventory the

> After reviewing financial results for 2010, Chicago Cannery’s president sent the following e-mail to his CFO and controller, Willie Logan. Dear Willie: I’m disappointed in the financial results for the year just completed. As you know, profits were $2 mi

> As an accounting intern working for your local police department, you learn that the department is considering starting a citizen’s police academy. In recent years, there have been events that have created friction between the police department and the c

> Your employer, Lawson Brake Systems, implemented an e-procurement system last year for purchasing nonoperating inputs. The installation has been such a success that the firm is now considering using the same system to acquire operating inputs (e.g., dire

> The financial results for the Business Education Department of Omega Educational Services Corporation for November 2010 are presented in the schedule at the end of this problem. Caroline Roper, president of Omega Educational Services, is pleased with the

> Choose letter C (for committed cost) or D (for discretionary cost) to indicate the type of each of the following described costs. Explain the rationale for your choice. a. Control is first provided during the capital budgeting process. b. Typical example

> Open-book management is consistent with another, larger trend in accounting—increased transparency of financial results. This trend follows a period in which many U.S. firms were guilty of generating misleading financial reports and hiding pertinent fact

> Jose Martin founded a firm that manufactures innovative toys. Since its founding in 2000, the firm has experienced steady growth. However, in the past six months, the firm’s products were featured on two major network television shows. As a result of tha

> As the economy entered the new millennium, Internet companies were competing head to head in many markets with established, traditional retailers for the consumer’s dollar. In comparing the financial statements of “e-tailers” relative to traditional reta

> Multinational firms domiciled in the United States do not have to pay U.S. income taxes on foreign earnings, unless those earnings are returned to the United States. Accordingly, the U.S. income tax system acts as a deterrent to firms to bring cash earne

> Birmingham Chemical evaluates performance in part through the use of flexible budgets. The selling expense budgets at three activity levels within the relevant range follow. The following assumptions were used to develop the selling expense flexible bud

> The founder and president of the Institute for Healthcare Improvement, Donald Berwick, is convinced that the U.S. health-care system can reduce costs by 30 percent while improving overall quality—just by getting health care professionals to adopt improve

> Top management of Capital Services observed that the budget for the EDP department had been growing far beyond what was anticipated for the past several years. Each year, the EDP manager would demonstrate that increased usage by the company’s non-EDP dep

> Lucy Liu has been asked to monitor the efficiency and effectiveness of a newly installed machine. The specialized machine has been guaranteed by the manufacturer to package 2,000 engine gaskets per kilowatt hour (kWh). The rate of defects on production i

> Sue and Jim Hansen are preparing their household financial budget for December. They have started with their November budget and are adjusting it to reflect the difference between November and December in planned activities. The Johnsons are expecting ou

> The managers and partners [who] were interviewed listed reduced manpower costs as the major advantage for utilizing paraprofessionals [in CPA firms]. It seems that these savings were realized in a number of ways. First, there were significant savings in

> Temporary or part-time employees may be used rather than full-time employees in each of the following situations: a. To teach undergraduate accounting courses at a university. b. To serve as security guards. c. To staff a health clinic in a rural area. d

> In many large business organizations today, it is common that the financial experts are physically located separately from operational personnel. One effect of this isolation is that the people with financial expertise often lack understanding of importa

> A list of committed and discretionary costs follows. Annual audit fees Internal audit salaries Annual report preparation and printing Marketing research Building flood insurance Preventive maintenance Charitable contributions Property taxes Corporate adv

> The following graphic indicates where each part of the dollar that a student pays for a new college textbook goes: Students are frustrated with the cost of their textbooks, but most publishers would say that the selling prices have merely kept pace with

> Slydell Industries produces a variety of consumer goods including lamps, home office desks, and storage cabinets. Many products sold by the company are purchased disassembled, and then assembled by the customer. To assist the customer with assembly, Slyd

> With an ERP system, a company can develop a “storefront” on the Internet. Through its storefront connection with customers, the company can gather much information about the market and the demand for specific products. Assume that you are employed by an

> In 2007, Nike settled a class action lawsuit filed on behalf of 400 African American employees of the company’s Niketown store in Chicago. One of the allegations in the suit was that the store segregated African American employees into lower-paying jobs

> In recent years, the financial press reported story after story regarding downsizing and layoffs in the U.S. auto industry. Often the stories discussed multiple rounds of downsizing events (such as those at General Motors). Assume that you are a stock ma

> In the past decade, the Japanese economy has fallen from its lofty levels of the 1980s. As a consequence, many Japanese companies have been forced to downsize. In most companies, one of two strategies can be pursued in downsizing. First, a company can la

> Business process reengineering (BPR) can be an effective tool to aid in achieving breakthroughs in quality improvement and cost management. Total quality management (TQM) is another philosophy about achieving organizational change. Conduct a library or I

> Financial professionals are at the forefront in adopting new technologies, many of which comprise the core of business strategies. Discuss how the increasing reliance of business on technology coupled with the responsibility of the financial professional

> Dayton Industrial produces a variety of chemicals that are used in an array of commercial applications. One popular product, a chemical solvent, contains two very caustic acids, A and B, each of which can present a very serious environmental hazard if no

> Colleges and universities have a variety of internal and external customers. Use a team of three or four individuals to answer the following: a. Who are three internal and two external customers of a college or university? b. How would each of the custom

> Following are descriptions of environmental waste situations. Identify the environmental strategy you would select to deal with each situation and discuss your logic. a. A relatively small amount of low-toxicity waste is produced. This waste is not easil

> You have been hired as a consultant by a company that manufactures plastic and resin toys. Company management is presently discussing ways to improve product quality. Evidence of quality problems is everywhere: high rates of product defects, many product

> ERP software can facilitate the sharing of information throughout the supply chain. For example, an Internet storefront can be used to interact downstream with the final customer. Sales data gathered from the storefront can then be used as a basis for de

> ERP software programs allow tighter linkages within a supply chain than were possible with earlier generations of software. Consider the possibility of a tighter link between the marketing and engineering functions within a firm that makes consumer elect

> Acquisition of new technology is often a perilous event for firms. The successful acquisition and implementation of new systems require much more than merely purchasing hardware and software. For example, costs are likely to be incurred for the following